Kostrzewa – Nice table setter for RI economy

Friday

Mar 21, 2014 at 11:14 AM

Here’s some food for thought.

John Kostrzewa Assistant Managing Editor johnkostrzewa

Here’s some food for thought.

Greencore Group’s decision last week to open a sandwich factory at the Quonset Business Park enhances Rhode Island’s reputation as an emerging hub of the food industry — one hope for refreshing the state’s stale economy.

Greencore said it will start building a $33-million, 107,000-square-foot facility in May and open next year with 370 factory workers and 23 managers. The sandwiches and on-the-go foods they make will be sold to convenience stores and groceries on the East Coast.

Since the announcement by Governor Chafee and other top state officials, some have asked, “Where’s the beef? Is that what success looks like in Rhode Island — factory workers making sandwiches and starting at $11 an hour?”

To me, it’s a significant start.

Greencore’s investment here is important because there is a fast-growing food industry in the United States, and Rhode Island should take as big a bite out of it as possible. Greencore’s arrival gives the state another big name asset on which to keep growing its food economy.

Consider the list of what’s already here:

Providence-based United Natural Foods is the largest distributor of natural and organic foods in North America. The company (UNFI:Nasdaq) reported $6 billion in sales in 2013 and has 7,000 employees, including 350 in a renovated mill in Olneyville.

Edesia Global Nutrition Solutions, also in Providence, is a nonprofit enterprise that has won international acclaim for making peanut-based nutritional supplements for people in impoverished countries around the world.

Johnson & Wales University, and several partners, have formed a nonprofit Food Innovation Nexus to bring together scientists, nutritionists, culinary experts and others to create innovative foods to treat medical conditions. Then there’s Rhode Island’s first food-business incubator in Warren to help food-related entrepreneurs get started.

Farm Fresh Rhode Island promotes homegrown products produced by an increasing number of farmers who are answering consumers’ call for more organic foods.

Major retailers and manufacturers, such as Daniele, which prepares specialty hams, salami and prosciutto at a plant in Burrillville, sell products worldwide.

Rhode Island’s restaurants are widely acclaimed as among the best in New England and are key components of the arts and entertainment culture.

All those pieces, and more, create a food industry that has been identified as among the state’s best chances for job growth, according to a new study called Economic Intersections that was supported by the Rhode Island Foundation and the Rhode Island Commerce Corporation.

Greencore’s international reputation will add to that potential. The company is based in Dublin, Ireland, and its shares trade publicly on the London Stock Exchange. Last year, Greencore reported $2 billion in sales and 10,155 employees. The company expanded from to the United States in 2008 and set up Greencore USA, based in Danvers, Mass.

Since then, the U.S. unit has opened seven manufacturing centers in regions across the country and plans to double its $250 million in sales in five years. Greencore USA also has been buying other food producers, including Lettieri’s, Marketfare Foods and HC Schau & Sons, and signed contracts to deliver food to big-name retailers such as Starbucks and 7-Eleven.

Three other pieces of Greencore’s decision to move here should be noted.

Liam McClennon, CEO of Greencore USA, said the company chose to replace two sites in Massachusetts with the Quonset plant because the location provides access to customers in New England and new markets in New York.

Second, McClennon noted that the 15-acre parcel was “site ready,” meaning the Quonset Development Corporation had already completed most of the required permitting and engineering, allowing the company to break ground within a couple of months of signing the lease. That allows developers to save time and money. The Route 195 Redevelopment District Commission should take note as it makes “pad ready” the 17 parcels on 19 acres freed up in Providence by the relocation of the highway.

And finally, there were incentives for closing the deal. By signing a 50-year lease, Greencore was able to cut its annual lease payment in the first year by 25 percent to $88,000. The lease also allows for an additional discount based on wages paid by Greencore.

In today’s world, companies have many choices for where to locate and invest. Public officials need access to a full array of incentives to attract job creators. Anyone still angered by the 38 Studios loan, and that’s most of us, needs to understand that the boneheaded deal shouldn’t mean all incentives should be off the table.

Greencore is a case study that worked — a win for Rhode Island and a boost for the state’s food economy. Rhode Islanders should learn from it and go after the next one.

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